AUGUSTA, Maine — Lawmakers heard hours of heated and conflicting testimony on Thursday on a proposal to make Maine the first state in the nation to require businesses to offer employees paid sick days.

Health groups, unions and advocates for women applauded the bill as a common-sense way to discourage the spread of contagious illnesses, such as the H1N1 flu virus, by encouraging sick workers to take their doctors’ advice and stay home.

But dozens of business owners and regional chambers of commerce — including the Bangor Region Chamber of Commerce — described the proposal as another well-intentioned but misguided legislative mandate that would discourage job growth at a time when the opposite is needed.

“Suggesting that businesses can and should absorb additional labor costs at this time is ill-advised and irresponsible,” said Rod Wiles, representing the Retail Lumber Dealers Association of Maine. “LD 1665 would place additional burdens on the backs of businesses already under great strain.”

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Do you think employers should be required to grant employees paid sick leave?

Sponsored by Senate President Elizabeth “Libby” Mitchell, LD 1665 would require that businesses with 25 or more employees offer up to six days of paid sick leave annually. That works out to one hour of paid sick time for every 40 hours worked.

For small businesses, the bill would guarantee employees up to three days of paid sick leave every year. The bill also would grant employees paid time off to receive medical, legal or social service care due to domestic violence, stalking or sexual abuse.

A study by the Institute for Women’s Policy Research estimated that the bill would benefit nearly 171,000 Maine workers — or 29 percent of the state’s work force — who do not accrue paid time off. While acknowledging the new requirement will cost businesses money up front, the study predicts that businesses actually will save $37 million annually largely through lower turnover rates and increased productivity.

Mitchell, a Vassalboro Democrat who is also running for governor, said she was open to suggestions to make the bill more palatable to the business community. But Mitchell said she is hard-pressed to find anyone who disagrees that employees coming to work sick — thereby spreading the illness to other workers — can harm productivity.

Likewise, a worker should not fear losing his or her job for staying home to care for a sick child or loved one.

“I defy anyone to say there is not a problem,” Mitchell told members of the Legislature’s Labor Committee.

But business owners argued adamantly that Mitchell’s bill actually would harm employees.

Bob Thing, director of operations for Hammond Lumber Co., estimated that the bill would cost his company $230,000 a year if every employee used their maximum sick days. That would force Hammond Lumber to cut employee costs elsewhere, either by reducing other benefits, forgoing pay raises or even laying off additional workers.

“It’s a difficult balancing act and a decision that should be made internally by individual businesses, not by the Legislature,” Thing told lawmakers.

A representative for Cianbro Corp. estimated the bill could cost her company $1.7 million in accrued sick time. Steve DiMillo of DiMillo’s Floating Restaurant in Portland put his price tag at $75,000 and predicted the measure will lead to abuse.

“It is not the Legislature’s job to impose this on small businesses,” DiMillo said. “Small businesses are driving the Maine economy.”

But Laura Harper with the Maine Women’s Lobby said nothing in the bill prohibits employers from taking action against a worker who abuses the paid sick time requirements. Harper said because many employees in retail, day care and nursing homes do not receive paid time off, the bill will disproportionately help women.

The Labor Committee will hold a work session before voting on the bill.